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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (10367)	6/30/2003 9:53:42 AM
From: Alastair McIntosh	Read Replies (1) \| Respond to of 95530

CSFB's view of the May SIA data: May SIA: Still Rolling Over • May Data. Off of May SIA data (lagging indicator) released Sunday, we remain cautious on semiconductor fundamentals given the current state of the cycle (mid-cycle dynamics), valuation (early cycle valuations), and environment (over-capacity, over-competition). May was roughly seasonal on a sequential basis, but continued to roll over on a year-over-year basis. Combined with a materially less than seasonal April, we need to see better than seasonal growth in June (avg. 38% of Q2 linearity) to achieve aggregate June quarter expectations for slightly less than seasonal. • 1st Leg Still Rolling Over. Worldwide semiconductor revenue increased 2.0% sequentially (in-line with 25-year historical average of +1.8%) on a 3-month moving average basis (3MMA) and increased 7.4% on a single-month basis in May. The 3MMA Y/Y growth rate peaked in December at +23.1%, then decelerated each month to 9.9% in May as the cyclical recovery loses steam. Unit growth (3MMA) also decelerated on a Y/Y basis, from 26.9% (Sept ’02) to 3.6% in May. Unit deceleration was steeper than revenues, which were aided by the second consecutive month of positive y/y ASP trend (however, comparisons getting tougher in July). The market is anticipating a second leg of growth, though we remain concerned about its timing and strength given the current end-demand forecasts and the tough semi environment. • Analog: The segment that posted the most relative unit strength (standard analog) also posted the most relative ASP weakness. For total analog, units and revenue were up 7.2% and 3.5% while ASPs were down 3.4% on absolute month-over-month basis. For Standard Linear, units and revenue were up 9.8% and 0.1% while ASPs were down 8.8% on absolute month-overmonth basis. • DRAM: DRAM revenue increased 2.5% M/M in May on a 3MMA basis, due primarily to units, which grew 3.0%, partly offset by an ASP decline of 0.5%. With the SARS situation fading in China and the launch of Springdale (supports DDR400 and dual channel), we expect (and are already seeing) a slight firming in DRAM spot pricing. • MPU: MPU revenue decreased 2.2% in May on a 3MMA basis, as a 1.9% increase in units was more than offset by a 4.0% decline in ASPs. This revenue decrease is below historical seasonality of a 0.9% decline in May over the past 15 years (3MMA) and slightly better than the 2.8% decline over the past 10 years.